Poultry
xClose

Loading ...
Swine
xClose

Loading ...
Dairy & Ruminant
xClose

Loading ...
Aquaculture
xClose

Loading ...
Feed
xClose

Loading ...
Animal Health
xClose

Loading ...
Publication
 
FEED Business Worldwide - June 2012
 
Undercapitalised and bitten by bird flu: Vietnam's poultry's trapped, yet hopeful poultry sector
 
by F.E. OLIMPO
 
 
Vietnam has the world's fastest growing, most exciting agribusiness market but its poultry sector is in a disastrous state. Despite years of policymaker's best intentions, output is lower today than it was in 2003. Whereas the country's pork and aquaculture production roughly kept with torrid demand growth, imports make up approximately half the chicken supply. But chickens are supposedly easier to raise than pigs. How did this happen?
 
With the economic liberalization and rapid growth of recent years, liberalization, better breeds, along with leading edge technology, were brought in by foreign companies. Investors included the CP Group from Thailand, Proconco from France, Cargill from United States, Topmill from Taiwan, and JAPFA Comfeed from Indonesia. Despite the sudden inward rush of foreign investment, these multinationals produce very little of the country's chicken. Many are happy to be importers or distributors.
 
The industry remains highly fragmented with about 60% of the country's annual broiler meat production of 350,000 tonnes still coming from backyard farms. In comparison, Thailand gets almost 100% of its broiler meat from commercial farms. With Thailand being ASEAN's agribusiness's role model, policymakers would like nothing less than to emulate its poultry sector's success.
 
To modernize the industry, the government's ultimate goal is to do away with technologically backward, undercapitalised backyard farms, where control of disease outbreaks that have hamstrung the industry's development, is next to impossible. Under the current Livestock Development Strategy, Vietnam hopes to produce 5.5 million tonnes of meat and poultry in 2020, up from around 4 million tonnes at the moment. The plan envisages per capita consumption rising to 57kg in 2020, from only around 40kg today.
 
 
Poultry for feed conservation
 
Within its overall protein consumption policy, boosting chicken production has been the cornerstone of the government's plan to control pork prices, which skyrocketed by as much as 70-100% last year driven after disease outbreaks created a supply shortfall.
 
In Southeast Asia, Vietnam leads in per capita pork consumption at over 21kg, compared to 20 kg for Singapore and about 13 kg for the Philippines. And with a population of nearly 90 million people, bigger than any European country, it often finds itself in short supply of pork, which accounts for 70% of the people's total meat consumption.
 
Due to strong demand, pork prices remain high most - if not all - of the time. So, to force down and stabilise pork prices, the government has made it a mission to encourage the people to replace pork with chicken meat, which accounts for only 20% of their meat diets. This in comparison to the 30% to 35% of protein poultry provides in most developed countries.
 
Apart from being cheaper – at about VND55-59,000/kg (US$2.64-2.83/kg) compared to VND72,000-93,000/kg ($3.45-4.46/kg) for pork as of May this year - chicken meat is seen as healthier, containing much more protein, lipid and vitamins than pork.
 
"Turning to chicken will not only help lower pork prices, it will also improve peoples' health," says Pham Duc Binh, deputy chairman of the Vietnam Animal Feed Manufacturers Association. But more importantly, the change in meat-consumption pattern would fit well into the government's overall plan to restructure the country's animal husbandry industry towards sustainability and self-sufficiency.
 
For it must be appreciated that the last ten years of fast rising meat consumption have transformed Vietnam from near feed self-sufficiency to a mass importer of both corn and soy. It has experienced some of the fastest corn and soy import expansion of any country in the world.
 
Fearing dependence on foreign feed grain and oilseeds, Vietnam seeks to conserve domestic feed resources. Requiring only half as much feed per kilogram of meat produced than pork, boosting poultry consumption at the expense of pork would go a long way towards lessening the country's fast growing dependency on foreign feed crops.
 
Pham Duc Binh explains that under the new livestock plan, the focus is to raise meat and poultry production from the 30% of total agricultural output today to 38% in 2015 and 42% by 2020. The underlying goal in this strategy is, according to him, to substitute as much imported feed crops and meat as is possible with local production. Last year, Vietnam's pork imports jumped 30% to 107,000 tonnes from only 83,000 tonnes in 2010.
 
Of course, to make chicken more palatable in a traditionally pork-eating nation, its supply must increase and its production cost decrease. Towards this end, Vietnam's poultry modernisation plan is rather ambitious. Apart from a shift to commercial operations, it involves improving hygiene and food safety and the upgrading of slaughterhouses and the cold storage chains. The latter measure appears aimed not just at improving the health of its people but, perhaps in the long run, at penetrating the export market.
 
 
Bird flu, industry stagnation, import penetration
 
But for almost ten years, these best laid plans have repeatedly crashed into something resembling a wall made of hard stone: From 1997 to 2002, output grew by 46.5% or at an average 8% annual rate. In 2003, output peaked at 383 thousand tonnes, bird flu struck Southeast Asia. Unlike Thailand where the industry recovered and even carved new export niches, Vietnam's poultry sector never recovered.
 
 
The above are excerpts, full versions are only available in FEED Business Worldwide. For subscriptions enquiries, e-mail membership@efeedlink.com
Share this article on FacebookShare this article on TwitterPrint this articleForward this article
Previous
My eFeedLink last read